Welsh wings deal hit by £25m row

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The Independent Online

BAE Systems is set to drop plans to build the wings for the £10bn Airbus A3XX superjumbo jet at its Broughton plant in north Wales, following a row about £25m of aid.

BAE Systems is set to drop plans to build the wings for the £10bn Airbus A3XX superjumbo jet at its Broughton plant in north Wales, following a row about £25m of aid.

The move will mean the loss of 1,400 potential jobs in this deprived part of Wales, which has previously been hit by massive cutbacks at steel-maker Corus.

The giant project is already being seen as a success, before it has even left the ground, as it were. At the Farnborough Air Show last month, Airbus secured £3bn worth of orders for the A3XX, from airlines including Emirates and Air France.

The A3XX will be the largest commercial airline flying, boasting three decks where passengers will be able to enjoy facilities such as showers, restaurants and even a gym.

However, the aeroplane will cost around £10bn to develop. The UK government has said it will lend Airbus, which is 20 per cent owned by BAe Systems, £530m to help cover the costs of launching the A3XX, while the French government is offering around £1bn.

However, the biggest problem facing the project is a £25m grant that BAe has sought to help it expand the Broughton factory to build the wings of the A3XX.

The £25m is described as Regional Selective Aid and has to be approved by the Welsh Industrial Advisory Board, a agency of the new Welsh Assembly.

The board has refused to confirm the payment and has demanded BAe Systems extend and resubmit its request.

For its part BAe Systems has threatened to build the wings elsewhere if the Welsh do not produce the money. "If the selective assistance is not paid, we will have to look at what options are available," said a spokeswoman.

The issue looks likely to be decided by Rhodri Morgan, the maverick Labour MP who is now head of the Welsh Assembly.

He is being pressurised from all quarters in Wales, with Labour MP Barry Jones joining with trade union leaders, the Liberal Democrats and Plaid Cymru to lobby Mr Morgan over the case.

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