Westland posed threat to Margaret Thatcher, and is embarrassing David Cameron afresh
By David Pallister | 29 May 2013
Westland Helicopters has a special place in the lexicon of British political dramas. In 1986, a fierce cabinet row over who should control the company – the Americans or Europeans – threatened to tear apart Margaret Thatcher’s Conservative government.
In 2013, it has returned to haunt David Cameron’s Conservative-led coalition administration with a new scandal.
Cameron made promises in February to India to help with a bribery investigation over a €556 million deal for Westland-made AW101 helicopters, but Exaro reveals today how his government is stalling over keeping those commitments.
“Cabinet meetings were increasingly rancorous, and both sides reverted to government by leak”
The company began life as Westland, and from 1915 made fixed-wing aircraft from its site in Yeovil, Somerset. During World War II, it made the Lysander, which was used for clandestine missions to fly British agents into occupied France.
Its first helicopter was the Dragonfly, a version of America’s Sikorsky S-51. The Dragonfly first flew in 1948, and entered service with the Royal Navy and Royal Air Force in 1953.
Westland made the Dragonfly after the war under a licence agreement with Sikorsky.
In 1961, it took over other helicopter companies in the UK to become Westland Helicopters. It built a version of the Sikorsky SH-3D, the Sea King helicopter, which entered service with the Royal Navy in 1969.
Westland Helicopters collaborated with Aerospatiale, the French company, to make the Gazelle, Puma and Lynx.
But by the early-1980’s, Westland Helicopters was struggling, and Sikorsky made a rescue bid.
Michael Heseltine, then defence secretary, opposed the US connection, preferring the company to merge with European counterparts.
But Thatcher and her new trade secretary, Leon Brittan, backed the Americans. The Conservative government was divided. For three months, cabinet ministers were at loggerheads, and the ‘Westland affair’ became a running scandal.
Heseltine called a conference of defence officials from France, Italy and West Germany. They declared that they would only buy helicopters designed and made in Europe.
The Westland board favoured the American tie-up.
Thatcher and Brittan thought that the company should decide.
Cabinet meetings were increasingly rancorous, and both sides reverted to government by leak.
Heseltine leaked a letter that he had written to Westland’s merchant bankers arguing – contrary to Thatcher’s assurances – that Westland would lose European orders if it chose to go with Sikorsky.
Patrick Mayhew, then solicitor general, was called in to reply. Mayhew’s letter noted Heseltine’s “material inaccuracies”, and was in turn leaked by the chief information officer at Brittan’s Department of Trade and Industry, Collette Bowe.
A furious row erupted between Thatcher and Heseltine at a cabinet meeting in January 1986 over ministerial ‘collective responsibility’.
Heseltine famously stormed out, announcing his resignation.
Robert Armstrong, cabinet secretary, reported later that month that Brittan, via his private secretary, had instructed Bowe to leak the Mayhew letter.
The 1922 committee of Conservative backbench MPs demanded Brittan’s resignation.
Brittan duly resigned, saying that he had lost his colleagues’ confidence.
Three days later, Labour set down an adjournment motion in the House of Commons, and some commentators – as well as Thatcher herself – believed that the affair could have brought down the government.
Labour’s motion failed. Even Heseltine joined the government lobby in the vote.
The Sikorsky link went ahead. In the 1990’s, Westland returned to profit, with big contracts from the UK’s Ministry of Defence for the EH101 Merlin and the AH-64 Apache, built under licence from Boeing, the American aerospace giant.
Meanwhile, GKN, the British defence contractor, had become a major shareholder in Westland since 1987.
Sikorsky’s parent company, United Technologies, was the other significant shareholder, but sold its stake to GKN in 1995.
Following a successful takeover, the company became GKN Westland Helicopters.
Six years later, GKN and Finmeccanica, the Italian defence contractor, created a joint venture by combining each of their helicopter divisions, Westland and Agusta.
Finmeccanica bought GKN’s stake in the joint venture in 2004, and became the owner of AgustaWestland.
In the early1990’s, Agusta was revealed to have paid bribes to socialist parties in Belgium to help win a contract for attack helicopters.
Finmeccanica, 30 per cent owned by the Italian state, and the country’s largest industrial group after Fiat, has for the past two years been embroiled in a swirl of allegations about slush funds and kick-backs. Finmeccanica denies the claims.