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Archives for August 2009

Very murky waters indeed

Andrew Neil | 11:23 UK time, Thursday, 27 August 2009

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return.jpgNow that the dust has settled, only somewhat and perhaps only for now, over the , we can see some things with a little more clarity -- but much remains murky in the extreme.

For a start, despite the speculation, nobody has produced clinching evidence to show the British government did a backstairs' deal with Colonel Gaddafi for the bomber's return. On the other hand, it is now quite clear that London was anxious to normalise relations with Tripoli as quickly and as best it could -- and that Gaddafi had made it clear that could not happen unless the bomber was sent back.

As a result, attention has moved away from the Scottish government's decision to free the bomber on controversial "compassionate" grounds to London and the role the British government might have played in facilitating the . And here we enter very murky waters indeed.

Official and unofficial British government contacts with Libya have been extensive. Last night we learned that three government ministers have made trips to Tripoli in the last 15 months: the then trade minister Digby Jones (May 2008), Health minister Dawn Primarolo (November 2008) and Foreign Office minister Bill Rammell (February 2009).

We do not know what was said in any of these Tripoli talks. But remember this: and a key figure in the bomber's release, has averred that "in all commercial contracts for oil and gas with Britain, Megrahi [the now-released bomber] was always on the table." So it's reasonable to assume the ministers had their ears bent.

But not them alone. In recent years two British prime ministers, a Russian oligarch, the scion of a European banking dynasty, a Prince of the Realm, a leader of Big Oil and our very own "Prince of Darkness" (aka ) have all had walk-on parts, if not more, in events that preceded the release of the Lockerbie bomber. It's a cast of characters that would do justice to a Bond film.

At the centre of this possible web of intrigue is Saif, the shaven-headed, London School of Economics-educated son of the Libyan dictator. Turns out he is a good friend of , the Russian aluminium baron, and Nat Rothschild, of the eponymous banking dynasty.

Saif invited both to his 37th birthday party in June in Becici in , into which Deripaska and Rothschild have poured around $1 billion to create a sort of St Tropez in the Balkans. Saif is also pumping Libyan money into Montenegro from his country's vast investment fund, reason enough for Rothschild last year to host a party in his honour in New York.

Thumbnail image for mandelson.jpgWhat's all this got to do with the Lockerbie bomber? Well consider this. Peter Mandelson's love of holidaying with the rich and famous in exotic places took him to Corfu this month for the second year in a row. Last August he visited Rothschild in his $60m Corfu estate and stayed on Deripaska's luxury yacht. This August he stayed at the Rothschild villa - and met Saif Gaddafi.

Mandelson claims the meeting was only "fleeting" but officials admit they did discuss the Lockerbie case. A week later it became public that the bomber might be released on "compassionate" grounds though, of course, there may be no connection. It was then revealed that Mandelson had previously met Saif at a reception in London in May.

The Business Secretary maintains that any suggestion that a deal was being cooked up is not just wrong but "offensive", which we should accept at face value until facts suggest otherwise.

But we have it from Saif's own mouth that there could be no real progress in British-Libyan business co-operation unless the matter of the Lockerbie bomber was dealt with.

So in all London's extensive discussions with Libya, did the British government never discuss what might be done?

Discussions, after all, have been going on at the highest level for at least five years.

In 2004 Prime Minister with Colonel Gaddafi which led to a broad rapprochement with Libya, a significant part of which was a prisoner transfer agreement which Gaddafi always saw as a means of bringing back his bomber.

At the time, powerful voices in Scotland said the Lockerbie bomber should be excluded from this agreement since there was only one Libyan in a Scottish jail. But London insisted it cover Scotland too. The schmoozing of Libya has continued under Gordon Brown, who met with the Libyan dictator during the recent G8 summit in Italy.

gadaffi.jpgBusiness contacts have increased the Blair visit: and a key Blair confidant, had numerous meetings with Colonel Gaddafi which culminated in a $1 billion oil deal in 2007. But the really big deals still eluded Britain, the BP deal progressed slowly and the Libyans were growing angry that their bomber remained in captivity.

By now Tripoli had made it clear repeatedly, at a number of influential levels, that they wanted Megrahi back.

As part of the British charm offensive , the Queen's second son who acts as Britain's special trade representative, has visited Libya three times in the past year (as well as visiting the Deripaska-Rothschild resort in Monenegro).

Saif has gone out of his way to befriend the Prince (who was due to make a fourth visit this year until the Libyans proved a tad too enthusiastic in welcoming back Megrahi). It is inconceivable, many will think, that Saif did not press Andrew on the matter (Buckingham Place is vague about it).

Libyan impatience turned to anger. When the Swiss arrested Saif's younger brother Hannibal for allegedly beating his staff, and withdrew billions of dollars from its banks. The Swiss retreated with a grovelling apology. The British, perhaps, saw it as a sign of what could happen to them if they didn't move faster on the Lockerbie bomber.

The British government has maintained throughout that the bomber's release was a matter for the devolved Scottish judicial system, which is, of course, technically correct.

salmondpa.jpgBut I have it on good authority that, privately, Scotland's First Minister, Alex Salmond, says he was in no doubt London wanted Megrahi returned to Tripoli. A letter from a junior Foreign Office minister in London to the Scottish government encouraging it to "consider" his release has been leaked. I know of no serious observer of British politics who believes that London would leave such a sensitive foreign policy matter purely to Edinburgh.

Prime Minister Gordon Brown has maintained a curious omerta on the matter, not even venturing a view on whether his native Scotland was right or wrong to return the bomber and venturing only the commonplace view that he was upset by the bomber's welcome on his return.

Colonel Gaddafi has been more explicit: on the bomber's return he went out of his way to thank not just Scotland but the British government. Oh yes, and Saif has just bought a $20m house in fashionable Hampstead, North London.

So all is now, apparently, hunky-dory between London and Tripoli now the bomber is back in the bosom of his family.

But at what price for Britain's reputation for plain, honest dealing with dictators and resolution against terrorism?

Lockerbie, after all was the - and the man from Tripoli was the only one ever found guilty of it

Still searching for green shoots

Andrew Neil | 11:32 UK time, Thursday, 13 August 2009

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While the - with the jury still out on Chancellor Alistair Darling's Budget forecast that growth will return in the current (Q3) quarter - other European economies that have not gone in for quite the degree of fiscal stimulus or monetary easing of which Gordon Brown is so proud are already showing signs of recovery.

sarkozy_merkel.jpgFrance and Germany have just announced that they're now out of recession, with in Q2 (April-June) of this year (during which the UK economy declined by another 0.8%). So while we still search for signs of a few green shoots, France and Germany already have plants to water and feed.

There is no doubt that there is a growing sense that the worst is over for the global economy and that recovery is taking root, especially in the Far East. As Bill Emmott, former editor of The Economist, : "All around the world, economies seem to be turning a corner, moving out of a period of this global recession in which the good news was just that things were getting bad more slowly into one in which things are actually getting better. Exports are picking up, order books are getting fatter, production is starting to rise in America, China, Germany, Japan and even Britain."

Mr Brown's main problem is simple: will there be enough of a recovery between now and an election next May for the government to take the credit and win a fourth term? Recovery certainly won't be visible by the Labour conference, when the PM hopes to launch his fight back to the election, because we won't have the Q3 growth figures by end-September when Labour gathers in Brighton.

But even if there is growth by late autumn and into the winter it might merely be an "economists' recovery" i.e only economists will notice it. And even if there is robust recovery (which few expect) voters might still not be inclined to give the government the credit. After all, John Major headed into the 1997 election with the economy recovering quite nicely but still the Tories got a drubbing because voters wanted revenge for perceived previous incompetence.

Mr Brown could face the same problem, especially since unemployment - - looks set to rise inexorably in the run up to the next election - and unemployment is the key economic indicator for many voters, whatever economic commentators say about GDP growth and other more intangible measures.

mandyincharge.jpgPeter Mandleson has been peddling the official line this week that unemployment would be so much worse but for the government's fiscal and monetary stimuli, telling the ´óÏó´«Ã½ and others that this action has saved "at least, probably far in excess of, 500,000 jobs".

But the Treasury has already let it be known that 500,000 is the very top end of its estimates (not the minimum) and it is being extremely coy about the basis of its calculations. I understand that its sums are based primarily on the impact of the cut in interest rates, in which case it will be hard for the government to take much credit - every government, left, right and centre, has slashed rates in the past 12 months.

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