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Walker's World: The U.K.'s Saudi mess

By MARTIN WALKER, UPI Editor Emeritus

LONDON, April 14 (UPI) -- Opposition parties never win elections, says the old political rule; governments lose them. And the British government of Prime Minister Gordon Brown, with the help of Saudis, seems to be following the traditional script.

Some opinion polls have his party 10 points behind the Conservatives, revitalized by their new leader David Cameron. The economy is slowing ominously, and Bank of England Governor Mervyn King is warning of a looming drop in living standards.

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The bubble in housing prices has expanded even more in Britain than in the United States, and the total sum of mortgage debt is higher as a proportion of gross domestic product. Last month saw a 2.5-percent fall in house prices, the sharpest since the recession of 1991.

As one of the world's two main financial centers, the City of London has generated a vast amount of wealth in the boom of the last 15 years. But it has left the British economy grimly vulnerable to the current financial crisis and the battered banking sector.

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After 10 years as chancellor of the exchequer, Brown could claim to have been the custodian of the longest continuous period of economic growth in British history. But his reputation for economic competence was dented by the run on the Northern Rock bank and its subsequent botched rescue and nationalization.

Brown, while witty and engaging in private, often seems to freeze in front of the TV cameras and come across as a dour and grumpy figure. In Berlin, aides to German Chancellor Angela Merkel have nicknamed him "the hermit of Downing Street" from his evident dislike of traveling to Europe for meetings with his partners in the European Union. Brown lacks the easy charm of Tony Blair that saw him come smiling through a number of setbacks.

Not much seems to be going right for the government. The rump garrison of some 4,000 British troops in Basra was barely consulted by the Iraqi government before it launched last month's ill-starred offensive against the Mahdi Army militias in that key southern city. The war was never popular in Britain, and whereas public opinion in the United States seems to have been impressed by the "surge" in U.S. troop deployments and the fall in violence, there has been no such reassessment in Britain.

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The war in Afghanistan, where British troops have been engaged in some of their toughest fighting since the Korean War more than 50 years ago, has exposed the problems of an overstretched and underfunded military. The troops have been short of helicopters and armor, and their communications equipment has not performed well. The difficulties exposed in the Iraq war, when British troops were spending their own money to buy desert combat boots because the Army's own kit proved unsuitable, have not been resolved.

Although the official figures show violent crime falling, the public perception is that Britain is an increasingly lawless and violent place because of the startling rise in the number of crimes committed with guns and knives, despite some of the world's toughest gun-control laws. There were 3,459 violent crimes with guns in London alone last year. Deaths linked to knife crime jumped last year by 18 percent, from 219 to 258, much of it by feral teenage gangs.

The tabloid press presents this as a sign that British society is falling apart, and certainly it is changing in unsavory ways. One dismal sign, that has nothing to do with government but everything to do with the way British people have traditionally defined themselves as a tolerant, placid and bucolic people, is the slow death of that grand institution, the British pub. Last year 1,409 pubs closed, spurred on by the rigid new anti-smoking laws. And over the past 30 years, beer sales have halved to just under 30 million pints a year as people drink more wine and go to wine bars, restaurants and drink at home.

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And last week came an event that left an unpleasant taste in the mouth. Two high court judges condemned the government's "abject surrender" to pressure from Saudi Arabia in insisting that a corruption inquiry by the Serious Fraud Office should be dropped in the national interest.

The case hinged on supposed false accounting by the British arms group BAE Systems in connection with the $80 billion al-Yamamah weapons contracts. The deal supposedly included a $100 million-plus "slush fund" for Saudi marketing and public relations. This somehow seems to have included paying for a six-week luxury honeymoon for the daughter of Prince Bandar, former ambassador to the United States, and the presence of "social hostesses" like lingerie model Anouska Bolton-Lee at lavish parties.

The Saudis demanded that the investigation be stropped when the British investigators contacted their Swiss counterparts to try and look at some Saudi bank accounts. At this point, the Saudis allegedly warned that the al-Yamamah deal was in jeopardy and that a new $12 billion deal to buy 72 Eurofighter warplanes from Britain would be blocked. Blair wrote a letter to Attorney General Lord Goldsmith to warn of "negative consequences" for national security if the inquiry continued.

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It was dropped. But it may reopen after last week's thundering report by the two judges who accepted private lawsuits demanding a judicial review of the process. This represents a new headache for Brown, at a time when he least needs one, when the Conservative opposition is baying at his heels, his own supporters are demoralized and a new election is less than two years away.

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