It really doesn't take a genius to work out why this article has appeared in the papers the very week of the deadline for negotiations between Iberia management and the Iberia unions.
As for BA, Vueling taking over LHR short-haul will never happen. Transfer passengers will expect to transfer on to BA and Club passengers will expect a short-haul business class product.
What *might* happen is Vueling setting up a base at LGW to go head to head on short-haul routes that Easyjet has largely seen BA off with BA doing long-haul and holiday short-haul routes to the Canary Islands etc. Don't forget the big draw of the Executive Club for business and leisure passengers and Vueling's brand profile in the UK market is tiny compared to BA.