Downing Street Says » Ian King Letter

» Thursday, November 4, 2010

Ian King Letter

Asked how the Prime Minister responded when he got the letter from Ian King of BAE Systems on 5th October that had emerged from the TSC, the PMS said that the Prime Minister had referred to the letter when he made the statement on the SDSR. The PMS added that as the Chancellor had said earlier in the day, we were shocked by the findings.

Put that lobbying of Prime Ministers and Cabinet Ministers by companies presumably goes on all the time and asked why the Prime Minister didn’t say that as the Government, we will take the decisions, the PMS replied that the Government had contractual obligations. The PMS added that as the Prime Minister said at the time of the SDSR, the Government was in a situation whereby it was locked into a contract that would cost more to get out of than to keep going with.

Asked why the Government would not try to renegotiate the carrier contract, the PMS said that as was clear at the time of the SDSR, the Government looked at this exhaustively and could not get out of this contract without it costing more to the taxpayer.

Put that Ian King said he had no doubt there was some scepticism around the analysis on the costs of the contract and asked whether the Prime Minister shared any scepticism around this analysis, the PMS said there was a lot of investigation at the time to see if there was any way around this situation with this particular contract.

Asked when the Prime Minister understood that there was a 15 year arrangement for the contract, the PMS said this was all brought to light in the SDSR discussions.

Put that the decision on the carriers was not made until the Prime Minister had seen the information in the letter; the PMS replied that the Prime Minister had already been aware as the MOD had previously raised these issues. The PMS added that this underlined the predicament that the new Government faced.

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