UK government set to approve new Leonardo military deal, saving thousands of jobs
Chancellor Rachel Reeves is set to sign a major contract with Italian defense company Leonardo that will secure the future of the UK’s last military helicopter manufacturing facility and secure 3,000 jobs.
A Treasury source confirmed on Friday that the deal would avoid the closure of Leonardo’s Yeovil plant in south-west England, which the firm had threatened without a new deal.
The deal, worth up to £1bn, was facing uncertainty just days before the March 1 deadline.
A Treasury source said Ms Reeves felt compelled to intervene to ensure the UK’s defense spending protected British jobs and employment.
“He wasn’t going to let this deal collapse under his watch,” the source added.
Chancellor Rachel Reeves and Sir Keir Starmer are understood to have chosen to intervene in response to the Ministry of Defense not prioritizing the project under the Defense Investment Plan.
The approved contract envisages the purchase of 23 medium lift support helicopters, fewer than the 44 specified in the 2022 government announcement.
A spokesman for Leonardo declined to comment.
A separate source told Reuters Leonardo’s tender offer will expire on March 1, adding that further talks between the government and Leonardo are likely in the coming days.
Sky News had previously reported that defense secretary John Healey was due to visit the factory in Yeovil on Thursday to announce the deal but backed out because the finance ministry had not yet signed the deal.
The government had previously said it needed to complete its defense investment plan before awarding the helicopter tender.
This plan has been delayed from the autumn due to media speculation of a £28 billion ($38 billion) shortfall in the military budget, despite promises from Prime Minister Keir Starmer. increase defense spending
The Yeovil site dates back to 1915, when it was known as Westland and built aircraft used in the First World War. In the 1950s it moved into helicopters and more recently produced the Merlin and Apache helicopters.
In addition to the 3,000 jobs on site, a further 9,000 jobs in the supply chain are supported by the factory; many employees work in the town, Somerset and neighboring Dorset.
