The Airbus Scandal

August 15, 2009

You might reasonably have thought it impossible, but New Labour have plumbed new depths of political shamelessness.

The utterly unelect(able)ed Business Secretary, Lord Mandelson, is extending a whopping £340 million to Airbus, so that the firm will build wings for its passenger planes at a plant near Bristol. According to the Independent, the Prince of Darkness told the press that such largesse is “excellent news for the UK aerospace sector and for the thousands of British workers within Airbus and its UK-based supply chain.”

Inasmuch as this money will protect a few thousand jobs in manufacturing (a hefty chunk of what’s left) this is, indeed, good news. However, inasmuch as it contravenes New Labour’s derisory “climate change policy” it is not.

Moreover, the past few weeks have seen an inspirational (but largely unsuccessful) fight by workers at a wind turbine manufacturer on the Isle of Wight. The Danish owned firm Vestas claimed that market conditions (read: U.S. government subsidies) meant that it needed to mothball its UK operations and relocate to the U.S. UK demand just wasn’t sufficient – an indictment of how bad the government has been at implementing a renewables strategy and also an indictment of any method of combating climate change which relies upon the free market to deliver the goods.

Vestas did not receive a loan from Mandelson to continue operations. Airbus, being a far larger European corporate player, easily did. In fact, they could have got more. As the Independent notes, “The Treasury is thought to have limited the latest payment because of financial constraints. Britain’s budget deficit has ballooned alarmingly, with estimates of the amount it paid to bail out the banks reaching £1.2trn.”

Unfortunately, the controversy in the business pages over the loan revolves more around American ire at European support than the environmental hypocrisy attached to stimulating the global air passenger business. The Obama administration, at Boeing’s instigation, have launched a case at the WTO, which in itself is mightily hypocritical.

Boeing receives many millions in taxpayer dollars every year via the U.S military industrial complex, making its protestations somewhat weak. In the past year, for instance, its military arm raked in $876 million in profits. The American firm has also, according to Airbus, also received billions of dollars to develop its own “Dreamliner.”

This corporate bunfight, raging while the planet warms inexorably, is disgusting. Yet the press has not once linked the massive support enjoyed by Airbus to the minimal assistance rendered to Vestas. UK industrial policy, piloted by Mandelson with none of the inconveniences arrayed by a working democracy, becomes ever more outrageous with no hint of criticism from the third estate.

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