Sir Jeremy Heywood – Sell-off of BAE, the Last of Britain’s Great British Defence Manufacturers

October 5 2012: Sir Jeremy Heywood, Cabinet enforcer and a web of cronies, at centre of incestuous NEXUS lobbying to end independence of BAE

The controversial merger of the defense giant BAE Systems with a foreign conglomerate has been described by one respected global affairs expert as the ‘biggest redrawing of global defenses since the Cold War’.

The Government is now under intense pressure to stop the deal by refusing to sell its golden share in BAE (which last year sold £19?billion of defense and aerospace equipment). The golden share gives ministers the power to block a change of control of the company, to bar any non-UK nationals from top jobs at the firm and prevent any foreign investor owning more than 15 per cent of the company. Yet there are widespread fears that the merger is a done deal and that David Cameron doesn’t mind that one of the last great British manufacturing institutions, whose history dates back to Vickers-Armstrong which built the Spitfire, will fall into foreign hands.

The Prime Minister is said to be in favour of the move after coming under pressure from the Cabinet Secretary, Sir Jeremy Heywood. He has been advocating the merger to the PM and has had a series of meetings with BAE and Morgan Stanley, the American investment bank which is advising the firm and which is in line to get millions from its work on the deal.

However, there is profound disquiet over the fact that 50-year-old Heywood has very strong personal links with Morgan Stanley staff, having worked at the bank as a director during a four-year break from the civil service. There is no suggestion, though, that he will benefit financially from the BAE merger. There have been claims that as the most important civil servant in government, the uber-ambitious Heywood (who was knighted by Cameron in January) is in danger of opening himself to charges that he could compromise the scrupulous independence expected of someone in his position. Heywood’s involvement has also led to widespread suspicions that the £28?billion BAE deal is being stitched together by the Whitehall establishment.

Several MPs want him to be questioned by the Commons defense select committee, which is investigating the merger. Heywood was a highly-paid director of Morgan Stanley as recently as 2007 — having taken a break from his Whitehall career. (Previously he had been Principal Private Secretary to Prime Minister Tony Blair and Head of Domestic Policy and Strategy at the Cabinet Office under PM Gordon Brown.)

Heywood’s stint at the U.S. bank was itself highly controversial. He was accused of making a large sum of money while employed by Morgan Stanley, which dealt with the ill-fated Southern Cross care homes group. Heywood was the ultimate head of the Morgan Stanley team which advised on the sale of Southern Cross in 2006 to a U.S. equity firm which soon hived off many of the freeholds of the homes to another company. In turn, that company sold them off. The result was that 31,000 frail and elderly residents in 750 homes faced being made homeless and 3,000 jobs were lost. Although he was not directly involved in the deal, it was never made clear how much money Heywood was paid by Morgan Stanley at the time, but banking sources said it would have been a handsome sum. Justin Bowden, a union boss, said Heywood was in the scandal ‘up to his neck.’
http://www.dailymail.co.uk/news/article-2213626/SPECIAL-INVESTIGATION-Sir-Jeremy-Heywood-centre-incestuous-nexus-lobbying-end-independence-BAE.html

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