In The Times today;
Vince Cable has been accused of bias in giving a £32 million loan to AgustaWestland after blocking a similar loan to a company in a Labour-held constituency on the ground of affordability.
The Business Secretary will be at Westland’s factory in Yeovil today to celebrate the launch of the AW169 helicopter. Yeovil is the constituency of David Laws, the Liberal Democrat who resigned as Chief Secretary to the Treasury last May.
Labour MPs are angry that Westland was given a loan by the Government only months after it had cancelled plans to give Sheffield Forgemasters loan guarantees worth £80 million.
David Blunkett, the former Home Secretary and MP for Sheffield Brightside, said: “Obviously, David Laws was in a very advantageous position before his resignation to influence these decisions. We are concerned that Sheffield Forgemasters has been very badly dealt with.”
The £32 million loan to Westland for the development of the AW169 was added as an amendment to the Comprehensive Spending Review last October. Three months before, Dr Cable had insisted that the Government could not afford to go ahead with the loan to Sheffield Forgemasters.
The Forgemasters loan had been agreed by the previous Government to allow it to build a 15,000-tonne press for manufacturing parts for nuclear reactors. It would have created 180 jobs, according to the company.
Angela Smith, the former Sheffield Hillsborough MP who now serves as MP for the nearby Penistone and Stocksbridge, said: “The question has to be asked why this investment is going to a part of the country represented by a Liberal Democrat and Sheffield has been left out in the cold. Is it right that the Government should appear to behave so partially?”
Mrs Smith has said that she would write to Dr Cable and to the chairman of the Business Select Committee to seek clarification on why one loan was affordable and the other was not. “We have no problem with Westland being given development loans but there must be parity in the way that companies are dealt with,” she said.
A spokesman for the Department of Business said: “The project reapproval process carried out in June last year, which included the £80 million loan to Sheffield Forgemasters, was about making the books balance for the last financial year. The Secretary of State has made clear that Forgemasters was a good project, but we were not able to bear the cost of all the commitments made by the previous Government.
“The public finance support for AgustaWestland will be over the next four years. The package has been subject to detailed negotiations with the company to ensure that the terms under which the money is provided deliver value for money to the taxpayer.”
The AW169 is expected to enter service in 2015. The launch is important as budget cuts at the Ministry of Defence could limit orders for Westland’s military helicopters, such as the Wildcat and Merlin.
Power struggle
The storm threatened to topple Margaret Thatcher. In July 1986, Michael Heseltine resigned from his Cabinet job after she thwarted his efforts to prevent an American takeover of the troubled Westland helicopter maker. The Defence Secretary famously walked out of No 10 after a tumultuous Cabinet meeting, accusing the Prime Minister of sabotaging his attempted rescue of Britain’s last helicopter company by a European consortium. Mrs Thatcher was in favour of the deal proposed by the American group Sikorski Fiat.
Two weeks afterwards Leon Brittan resigned as Trade and Industry Secretary after admitting leaking a government document criticising Mr Heseltine.
In 2006 the former Defence Secretary demanded a fresh inquiry into the incident, saying there was “a crime that had never been investigated”. Westland eventually merged with the Eurocopter and Agusta groups in 2000. Lord Heseltine said later that the incident had cost him “four years of my life”.
Was anyone there today that can shed light on AW169.... Wastelands strikes again.?
