The Government is set to sign off on a £1 billion contract with helicopter maker Leonardo, after fears about the security of thousands of staff at its UK site in Somerset.
The Italian company’s plant in Yeovil had been left in limbo as it awaited the Government’s decision on whether to award the contract.
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Union urges end to Leonardo contract delays as thousands of jobs remain at risk
Yeovil MP demands government action with 3,300 Leonardo jobs at risk
Yeovil MP fears jobs at risk after delays to UK defence contract
Leonardo has been the sole bidder for over a year for the contract to deliver the Ministry of Defence (MoD)’s new medium helicopter programme, with the bid formally expiring on Sunday.
The Press Association understands the Treasury is preparing to approve a deal to purchase a new fleet of defence helicopters.
It is understood that Chancellor Rachel Reeves and Sir Keir Starmer had chosen to intervene in response to the Ministry of Defence deprioritising the project as part of the Defence Investment Plan.
It follows reports that a planned visit by Defence Secretary John Healey to the Yeovil plant to award the contract was cancelled on Thursday.
Leonardo says it is the UK’s only end-to-end rotary wing manufacturer, with around 3,300 staff and working with almost 12,000 suppliers.
Chief executive Roberto Cingolani is reported to have previously said the UK firm’s future would be at risk if a deal was not approved.
A Treasury source said: “Rachel cares about keeping the country safe and driving jobs in the UK because our security and economic growth are fundamentally connected.
“This project is key to those principles – she wasn’t going to let this deal collapse under her watch.”
In January, Yeovil MP Adam Dance urged the government to end delays and approve the deal.
The MP said in a statement that nothing has been formally agreed, but he is 'cautiously optimistic'
He said: "There has been positive progress on the New Medium Helicopter contract in recent days, and discussions are moving in a promising direction.
"However, my understanding is that nothing is formally agreed yet and the contract is not over the line.
"I know how important this decision is for Yeovil - for the workforce at Leonardo, for the supply chain, and for our town more widely. That is why I have continuously pressing Ministers for clarity and urgency and championed this in Parliament.
"I remain cautiously optimistic and hope we will have more concrete news in the coming days. Until then, I will continue working behind the scenes to secure the outcome Yeovil deserves.”
Trade union Unite, which represents thousands of aerospace and defence workers, said it was a “tremendous victory” for the industry, the company and its staff that a contract was being awarded.
General secretary Sharon Graham said: “Unite has been campaigning for this Government to buy British defence for over a year because it is vital for jobs and skills as well as national security.
“The Leonardo contract is a tremendous victory for Unite members in Yeovil and across the aerospace sector.
“Without their commitment, hard work and dedication, it would not be being signed today.
“Of course, we are pleased that Rachel Reeves has now listened to Unite on this issue.
“However, it took way too long to get this done, and we still have to question why workers were left in the dark until the 11th hour.”
Leonardo and the Ministry of Defence declined to comment.
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