Rachel Reeves is under increasing pressure to approve a £1 billion military helicopter contract, which is viewed as essential for maintaining the UK’s aerospace strength and protecting thousands of jobs at Britain’s last remaining helicopter manufacturing site.
Up to 3,000 workers at the Leonardo Helicopters facility in Yeovil face the risk of losing their jobs, highlighting the significant human impact of delays affecting the UK’s only complete helicopter design and manufacturing capability.
Reports indicate that Treasury officials have informed the Ministry of Defence (MoD) that funding for the New Medium Helicopter (NMH) program will not be approved until the MoD’s broader equipment plan is finalised.
A senior figure told the Telegraph: “It’s over. There’s been a lot of activity, but now Treasury officials have said this is not going ahead. This is really bad news. It is going to be biblical, we’re looking at 3,000 job losses.”
Industry representatives warn that such a delay could jeopardise the deal, as Leonardo S.p.A.’s bid is believed to expire at the end of Sunday. This standoff has raised concerns that the contract could collapse without swift approval.
The Yeovil factory in Somerset employs around 3,000 workers and is regarded as a cornerstone of the UK’s sovereign helicopter manufacturing capacity. Defence industry representatives caution that losing this site would end Britain’s ability to design and manufacture helicopters domestically, increasing reliance on foreign suppliers and eroding aerospace engineering skills, thereby undermining the UK’s strategic defence sovereignty.
Senior executives from Leonardo reportedly travelled to Somerset in anticipation of an announcement by Defence Secretary John Healey, only for the visit to be cancelled at the last minute. Sources suggest that both Keir Starmer and the MoD support the agreement, but the Treasury is exercising caution due to broader fiscal constraints. This raises questions about the political implications of either delaying or approving the deal and how it could affect future defence policies.
Downing Street has not confirmed whether the Prime Minister will intervene. Supporters of the contract argue that approving the program would preserve high-skilled manufacturing jobs, protect sovereign defence capabilities, and enhance Britain’s aerospace export potential. However, critics within the Treasury are reportedly weighing the cost against other spending priorities, particularly as the government reviews long-term defence procurement plans.
James Cartlidge, the shadow defence secretary said: “If Labour scraps the new medium helicopter programme, it will be a disaster for the factory at Yeovil and the UK’s sovereign military rotary capability. Above all, it would be a disaster for thousands of skilled workers in the South West and right across the UK, the supply chain, whose jobs rely on the site.
“Rachel Reeves has banged on about how defence is an ‘engine for growth’, but in reality her total failure to put money into defence is destroying a once-great industry.”
With the bid deadline fast approaching, the urgent need for decisive action becomes evident to prevent the Yeovil site from collapsing and to protect thousands of jobs. Industry insiders warn that without immediate clarity, the factory could face severe restructuring, which one source described as resulting in “biblical” levels of job losses, with significant economic and social consequences for the local community and beyond.
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