New BAE boss Ian King has vowed to improve the company's ethical standards in the wake of the Woolf Report into the company's ethics following allegations of bribery and corruption, and the Serious Fraud Office's controversial decision to abandon an investigation into links with Saudi Arabia. Hard to reconcile that with the fact this is coming from an arms company.

But the really interesting part is the report that the Serious Fraud Office is now looking at a US-style deferred prosecution plan where companies involved in bribery abroad could avoid prosecution by admitting guilt and paying financial penalties.

The SFO has not distinguished itself in this scandal and the prospect of getting these sorts of deals up will not improve its reputation. Won't be much of a deterrent either.