- Propaganda coup for Nicolas Sarkozy just days after he declared Britain has ‘no industry’
- French firm Dassault Rafale slashes price of fighter jets to ensure deal
Tim Shipman and Sue Reid
Last updated at 9:16 AM on 1st February 2012
India has snubbed British industry and awarded a £13billion deal to supply fighter jets to France.
The contract was lost despite Government claims that the UK’s £1billion aid package to India would help secure the order.
Yesterday’s decision also handed a propaganda coup to French President Nicolas Sarkozy, who sneeringly claimed on Monday that Britain ‘has no industry’.
Vive la France: The Rafale jets will replace India’s ageing fleet of Russian MiGs, with the French company entering exclusive talks with the Indians to finalise the deal by March
Rejected: RAF Typhoons fell to second place, despite the belief that controversial aid packages would secure the India contract for Britain
French firm Dassault Rafale was selected as the preferred bidder to supply 126 military jets to the Indian air force.
BAE Systems, which builds the Eurofighter Typhoon jet, was consigned to second place.
International Development Secretary Andrew Mitchell said in December that Britain’s controversial foreign aid programme was partly designed to win the bid.
Britain is sending £280million to India for each of the next four years, even though the country has more billionaires than Britain and has its own space programme.
The aid package is 15 times larger than the £18million France sent to India in 2009.
Vive la France: The decision is a propaganda coup for French President Nicolas Sarkozy, who sneeringly claimed on Monday that Britain ‘has no industry’
Asked to justify Indian aid last year, Mr Mitchell said: ‘It’s a very important relationship. The focus is also about seeking to sell Typhoon.’
The decision is also a setback for David Cameron, who visited India in 2010 with six Cabinet ministers and around 60 businessmen to try to establish Britain as the ‘partner of choice’ for India.
Yesterday, Indian officials said Dassault emerged in front because the Rafale jet was ‘much cheaper unit-wise’ than the Eurofighter.
It was reported today that Dassault slashed its price demands to ensure the deal was done.
One Indian defence ministry source said: ‘The Indian air force, which is well-equipped with French fighters, is favouring the French.’ The Rafale jets will replace India’s ageing fleet of Russian MiGs.
The French company will now enter exclusive talks with the Indians to finalise the deal, which is expected to be signed in March. The Typhoon is built by BAE Systems and a consortium of German and Spanish branches of European aerospace giant EADS and Italy’s Finmeccanica.
Last night Tory MP Peter Bone
questioned the purpose of sending British aid to India at a time when
cuts are being made at home. ‘It just goes to show that it’s a myth that
by Britain becoming an aid superpower and doling billions of pounds out
to countries like this exerts any influence whatsoever on the decisions
made by those governments when purchasing equipment.
‘We need to slash the international development money and invest the billions saved to help hard-pressed British families.’
Unite union last night expressed fears that the loss of the deal could
threaten 4,500 jobs at BAE Systems’ Samlesbury base in Lancashire, where
key components of the Typhoon are made, and Warton Aerodrome near
Preston, where the aircraft is assembled.
officials and BAE Systems insisted that they were not completely
eliminated from the process and could still land the deal if India’s
talks with Dassault collapse.
spokesman for UK Trade and Investments, the branch of the Government
that promotes trade deals overseas, said: ‘This does not rule out
Typhoon for India.
decision is about who the Indians have assessed as making the lowest
bid and therefore asked to enter into further negotiations.
the Indians have not yet awarded the contract. We continue to believe
Eurofighter Typhoon provides the best capability today and into the
for BAE Systems added: ‘We believe Eurofighter Typhoon offers the best
military, industrial and economic solution for India.’
Unite warned that the selection of a French fighter aircraft for the multibillion-pound contract could have serious implications for BAE Systems and the UK aerospace industry.
National officer Ian Waddell said: ‘We are seeking confirmation from BAE Systems that Rafale has been selected as their preferred fighter by India.
‘The Typhoon is a superb aircraft which supports thousands of highly skilled jobs in the UK, both at BAE Systems and in the supply chain.
‘We are concerned about the serious implications this decision may have and want urgent talks with the company about future plans for the workforce.
‘There are other export orders to be won and it is critical that the company maintains its commitment to Typhoon despite this setback.’
The CSEU, an umbrella body for manufacturing unions, is meeting the MoD’s Procurement Minister, Peter Luff, next week and the unions will raise this issue as a priority.
Unite said it will continue to concentrate its efforts to deal with the 3,000 potential redundancies at BAE Systems at Brough, Samlesbury and Warton which were announced late last year.
WHAT A WASTE: BRITAIN GIVES £1.4BN IN AID TO A COUNTRY WITH £900BN STORED IN SWISS BANKS – YET MANY STILL LIVE IN SQUALOR
India is racing up the league of rich nations. Indeed, its soaring economy will outstrip the UK’s by 2022. According to financial advisers Merrill Lynch, India has 153,000 dollar-millionaires — a 20 per cent rise in a year, compared with Britain’s own paltry increase of less than 1 per cent.
Indians have squirrelled away more money in Swiss bank accounts (a total of £900 billion since independence from Britain in 1947) than the rest of the world combined.
And when they were invited recently by the Indian Government to exchange for paper money the gold bars and jewellery stashed in their homes (so pumping cash into the national economy), a horde of £160 billion was offered up.
Poor: India is a rich nation and receives billions in aid, yet many still live in poverty
Such is the economic power of India that it now gives out more foreign aid than it receives, and has handed over £3.5 billion to cement relations with impoverished Africa.
Meanwhile, it invests huge sums in ambitious projects: £2 billion will put the first Indian astronauts into space by 2016, and the annual defence budget tops £22 billion, with a third aircraft carrier now under construction in an Indian shipyard.
Perhaps the perfect example of the garish spending of India’s newly-rich is the £2 billion, 27-storey skyscraper in Mumbai built by a local industrialist as a home for his wife and three children. It is the most expensive house anywhere in the world.
Despite this enormous wealth, David Cameron has decided to give India £1.4 billion between now and 2015. The sum is almost 1 per cent of Britain’s own £159 billion debts.
Missing: This school has no desks or chairs because they had never been delivered and are presumed stolen from the factory where they were made
What’s more, it’s feared that some of this money is chewed up by corruption and fraud.
An official report has revealed that 90 per cent of government officials have accepted a bribe for favours, from ripping up a speeding fine to rubber-stamping a building deal. Corruption, as the Indian prime minister has confessed, is as much a national sport as cricket.
Officials admit that £70 million of the £388 million given by Britain towards a national flagship education programme called Sarva Shiksha Abbiyan (‘education for all’), which promises free classes for every child from the age of six to 14, has been squandered though widespread corruption and theft.
The result is a hugely divided nation, with the super-rich surround by extreme poverty.
Indian cities are riddled with slums – there are 500 in Bhopal alone – and thousands of families live in squalor, even those from the middle classes. Sewage runs down the muddy streets lined with shacks made of corrugated iron with no front doors.