Rachel Reeves ‘to offer go-ahead’ for £1bn navy helicopter deal

[ad_1] Rachel Reeves is to approve a £1bn deal to construct navy helicopters in Yeovil, saving about 3,000 manufacturing jobs, in response to stories.

The chancellor is predicted to signal a contract with Leonardo – the Italian proprietor of the previous Westland manufacturing facility in Yeovil, Somerset – to construct the brand new battlefield helicopters, after months of hypothesis as as to if the historic web site would survive.

Employees had feared the corporate would comply with by means of on threats to shut the power on the finish of March if the federal government failed to put an order for brand spanking new helicopters in time.

Leonardo was the one bidder for the UK’s £1bn “new medium helicopter” contract that was launched in February 2024, after the US aerospace firm Lockheed Martin and Europe’s Airbus pulled out.

The brand new plane will change the Royal Air Power’s ageing fleet of Puma helicopters, which had been in service because the Seventies. The choice to agree the contract, first reported by the Monetary Occasions, got here simply earlier than Leonardo’s provide was set to run out on Sunday.

The contract determination appeared to return after a last-minute reversal from the Treasury. A supply with data of the matter stated that even till early Friday afternoon, it had appeared the contract can be rejected.

John Healey, the defence secretary, was even pressured to cancel a visit to the Yeovil manufacturing facility on Thursday, they stated, amid last-minute uncertainty over whether or not the Treasury would approve the deal.

By Friday afternoon, Treasury officers have been saying the chancellor would give it the inexperienced gentle. “Rachel cares about retaining the nation secure and driving jobs within the UK as a result of our safety and financial progress are basically related,” one informed the FT.

The Unite normal secretary, Sharon Graham, stated the contract was “an incredible victory for Unite members in Yeovil and throughout the aerospace sector”.

The James Bond movie Skyfall featured a Leonardo Merlin helicopter – now owned by Canada’s air pressure – in its remaining scenes. {Photograph}: Simon Pryor/Leonardo She added: “Nonetheless, it took means too lengthy to get this accomplished, and we nonetheless must query why staff have been left at nighttime till the eleventh hour.”

It had confronted repeated delays because the Ministry of Defence tussled with an enormous funding hole, which has additionally held up the publication of a key navy spending plan that was due final yr.

Producers have grow to be more and more annoyed with the look forward to the defence funding plan (DIP), which can present how the federal government will fund its strategic defence overview, the blueprint for reworking the UK navy amid rising threats from Russia and rising commitments to Nato.

An MoD spokesperson stated: “The UK’s new medium helicopter programme is ongoing and no remaining procurement selections have but been made. That consequence shall be confirmed sooner or later.”

In November, Leonardo’s chief government, Roberto Cingolani, informed traders he was negotiating with the MoD to attempt “to spice up the collaboration with the UK authorities”, whereas in December he wrote to the defence secretary, John Healey, and threatened to scrap all funding in Britain.

On the time, Cingolani described the brand new medium helicopter contract as “a cornerstone” of the Italian firm’s UK technique and added: “Any delay or cancellation within the programme award … would pressure a re-evaluation of Leonardo’s UK presence, together with funding in electronics and cybersecurity divisions.”