Airbus gets pounds 123m launch aid despite Treasury opposition
Tuesday 03 February 1998
The move, which was strongly opposed by Treasury officials on the grounds the project could be self-financed, was seen by some as a government attempt to send the right political signals to Europe.
Margaret Beckett, President of the Board of Trade, said the cash to Airbus, which is 20 per cent owned by British Aerospace, was given as part of a new relationship with industry. The money would secure more than 2,000 jobs at BAe and underpin the security of a further 25,000 jobs at its suppliers, she said.
Mrs Beckett explained: "The agreement with BAe continues the Government's drive to create a new partnership between government and industry. The investment by the Government is repayable and will be on a commercial basis."
The money, which follows a pounds 200m aid package to Rolls-Royce to develop Trent engines for the project, will be used as launch aid in the development of two new aircraft, the long-range A340-500 and the 380-seater A340-600. These would compete with the US built Boeing 777 and the smaller versions of the 747.
Sir Richard Evans, BAe chief executive, said the cash injection was "excellent news for Britain, for Airbus and for the 25,000 or so workers across the UK who are involved with this great European project."
He added: "The government is investing in success, given that the A340- 500/600 has attracted 100 commitments worth $13bn from major airlines including Virgin, Air Canada and Egypt Air."
These comments reinforced the views of the Treasury and others that the project would have proceeded regardless of public funding. Arabella Grant, aerospace analyst with stockbroker Panmure Gordon, said: "Airbus would have gone ahead with this anyway. But the Government should neither win nor lose because it's a guaranteed long-term investment."
Outlook, page 25
- 2 California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
- 3 School kitchen manager 'fired from Colorado school for giving hungry students free lunches'
- 5 Charles Kennedy 'had better judgement drunk than many sober politicians' says Ian Hislop
California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
Amber Peat: Body found in search for missing 13-year-old who left house after argument with her parents
School kitchen manager 'fired from Colorado school for giving hungry students free lunches'
Isis executes three gay men by dangling them from top of 100ft building and letting go
Alton Towers crash: Four guests seriously injured as Smiler ride carriages collide
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Church of England 'one generation away from extinction' after dramatic loss of followers
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...