The Westland affair in 1985–86 was an episode in which Margaret Thatcher, Prime Minister of the United Kingdom, and her Secretary of State for Defence, Michael Heseltine, went public over a cabinet dispute with questions raised about whether the conventions of cabinet government were being observed and about the integrity of senior politicians.
The argument was over the future of Westland Helicopters, Britain's last helicopter manufacturer, which was to be the subject of a rescue bid. The Defence Secretary, Heseltine, favoured a European solution, integrating Westland with a consortium including British Aerospace (BAe), Italian (Agusta) and French companies. Thatcher and Trade and Industry Secretary Leon Brittan, while ostensibly maintaining a neutral stance, wanted to see Westland merge with Sikorsky, an American company.
Heseltine refused to accept Thatcher's choice and claimed that Thatcher had refused to allow a free ministerial discussion of the matter, even suggesting that she had lied about cancelling a scheduled meeting. In January 1986, when he was ordered to cease campaigning for his European consortium, he resigned and walked out of a Cabinet meeting. Brittan was then forced to resign for having ordered the leaking to the press of a confidential legal letter critical of Heseltine, and for his lack of candour to the House of Commons about his efforts to persuade BAe to withdraw from Heseltine's consortium.
Thatcher's survival as Prime Minister briefly appeared in question, but she rode out the crisis. The episode nonetheless was an embarrassment to the Conservative Thatcher government and undermined her reputation.
Heseltine stated that Thatcher had violated constitutional law. He defended his stance, directly after his resignation, in an article published in The Observer.Michael Heseltine, 'When I knew I Had to Go', Observer, 12 January 1986 Constitutional historian Peter Hennessy wrote an academic article and subsequently a book about the stance: the effectiveness of the Cabinet system including the changes Margaret Thatcher had made.Hennessy, Peter (1986). Cabinet. Basil Blackwell, p. 94-122. It later became clear the resignation of Heseltine nearly resulted in the political fall of Thatcher.
April 1985 The Westland affair originated with Alan Bristow's bid for the company in April 1985. By June, Bristow was threatening to end his bid unless the Government assured him that there would be future orders for the company from the Ministry of Defence and that the repayment of over £40 million of launch aid for Westland's newest helicopter from the Department of Trade and Industry was waived.
Heseltine at this time was uninterested in Westland helicopters when approached by Norman Tebbit, the then Trade and Industry Secretary, as plenty of American helicopters were available to meet Britain's defence requirements. He attended two meetings about the company's future in June 1985, chaired by Thatcher. It was decided that Tebbit should persuade the Bank of England to co-operate with the main creditors in the hope that a recovery plan and new management would end the threat of receivership.
Bristow withdrew his bid and in late June Sir John Cuckney was brought in as chairman of Westland.
November 1985 Cuckney proposed that a new minority shareholder of 29.9% be introduced to Westland. No British firm was willing, but Sikorsky was interested. Cuckney proposed that Westland merge with United Technologies Corporation, of which the US company Sikorsky was a subsidiary. Heseltine came out against this plan after realising that Westland would probably become responsible for assembling the Sikorsky UH-60 Black Hawk, which the Ministry of Defence would then be under great pressure to buy. He preferred Westland to go into receivership so that British companies GEC and British Aerospace could buy the viable parts of the business.
In mid-October Heseltine suggested a European consortium which would include French Aérospatiale, German MBB and Italian Agusta (Sikorsky was now negotiating a strategic linkup with Italian Fiat). Leon Brittan, who had replaced Tebbit as Trade and Industry Secretary in September 1985, at first urged Thatcher to consider a European option (Heseltine later claimed Brittan this option, although Brittan denied this). The Government was officially neutral (i.e. arguing that it was a matter for Westland directors and shareholders) but by November Heseltine was lobbying hard for the European option.
In late November Peter Levene, Chief of Procurement at the Ministry of Defence, had a meeting at the Ministry with his French, West German and Italian counterparts (the National Armaments Directors or NADs) and the representatives of the consortium, and agreed to "buy European" for certain classes of helicopters. If Westland went ahead with Sikorsky its helicopters, under this new agreement, would be unable to be bought by the four governments. The meeting was later praised by the House of Commons Defence Select Committee. Thatcher, who only learned of the meeting through Cuckney, was displeased, as were Brittan and the Treasury, who thought the US option might be cheaper, although Thatcher and Leon Brittan kept to their official pretence of neutrality.
December 1985 In early December Thatcher had two ad hoc meetings with Heseltine, Brittan, Tebbit, William Whitelaw (Deputy Prime Minister), Geoffrey Howe (Foreign Secretary) and Nigel Lawson (Chancellor of the Exchequer) on 5 and 6 December. Brittan argued that the NADs' opposition should be set aside, but Howe and Tebbit were not unsympathetic to Heseltine's proposed consortium, and the decision was deferred to the Cabinet Economic Affairs Committee (E(A)) on Monday 9 December 1985. Cuckney and a Westland financial adviser were invited to attend the E(A) meeting. Cuckney said that it was the management's view that the Sikorsky option was the best one. A majority of the E(A) meeting agreed to dismiss the NADs' opposition. Thatcher, who complained that three hours had been spent discussing a company with a market capitalisation of only £30m (a tiny amount in government terms), allowed Heseltine until 4 pm on Friday 13 December to submit a viable proposal for a European deal. He did (with British Aerospace and GEC now part of his consortium), but Westland's directors rejected it and chose Sikorsky. Heseltine had expected that there would be a second meeting of E(A) to discuss his consortium, but no such meeting was called; Thatcher later claimed that the Monday meeting had agreed to leave the decision to Westland to take, but it later emerged that Ridley and Lord Young placed such a meeting in their diaries and had been told by Number Ten that it had been cancelled. Heseltine threatened resignation for the first time.
At Cabinet on Thursday 12 December Heseltine had an angry exchange with Thatcher about the allegedly cancelled meeting (Thatcher claimed that no such meeting had ever been scheduled). Westland was not on the Cabinet agenda that day and Thatcher refused to permit a discussion on the matter, arguing that Cabinet could not do so without the necessary papers. Heseltine asked for his dissent to be minuted, and this was not done, although Cabinet Secretary Robert Armstrong claimed that this had been an error and added it himself. On Monday 16 December Brittan told the House of Commons that the decision was up to Westland; on Wednesday 18 December Heseltine won the backing of the Commons Defence Committee for the European Consortium's latest bid. On Thursday 19 December the matter was discussed at Cabinet for ten minutes: Cabinet approved leaving the decision to Westland and Heseltine was ordered to cease campaigning for the European option.
Over Christmas, Thatcher discussed with close colleagues the option of sacking Heseltine, as Brittan had urged her to do (Chief Whip John Wakeham cautioned against), but—as she later said in her memoirs—she shrank from doing so as he was too popular and weighty a political figure. Thatcher and ministerial colleagues spent two and a half hours writing three successive drafts of a letter threatening Heseltine with the sack, but did not send it as her press adviser Bernard Ingham advised that Heseltine might use it an excuse to resign.
January 1986: leaks By now the political row was being discussed in the media, partly because of the lack of other news in December. Cuckney wrote to Thatcher, at her behest, asking for reassurance that the Sikorsky deal would not damage Westland's business prospects in Europe. Heseltine was not satisfied with Thatcher's draft reply when he saw it and consulted Sir Patrick Mayhew (Solicitor-General and acting Attorney-General as Sir Michael Havers was ill) on the grounds that the government might be legally liable for any incorrect advice. Heseltine supplied extra material about the risk of losing European business, which Thatcher did not include in her reply to Cuckney. Thatcher replied to Cuckney to the effect that the British Government would continue to support Westland in gaining orders in Europe.
In early January Heseltine then wrote to David Horne of Lloyds Merchant Bank, who was advising the European consortium (in reply to planted questions from Horne which had been dictated to him over the phone by one of Heseltine's staff), giving him the advice which Thatcher had declined to include in her letter to Cuckney. Contradicting Thatcher's reassurances to Cuckney, Heseltine claimed that the Sikorsky deal would be "incompatible with participation" in European helicopter projects. Heseltine's letter was leaked to The Times. This was a blatant challenge to Thatcher's authority as Heseltine had not consulted Downing Street, the Department of Trade and Industry or Mayhew before writing to Horne.
Heseltine's letter to Horne, on Thatcher's request, was referred to the Solicitor-General, Patrick Mayhew. Mayhew sent a reply to Heseltine, noting "material inaccuracies" in Heseltine's letter, and asking Heseltine to write to Horne again, correcting them. Mayhew's letter of rebuke to Heseltine—marked "Confidential"—reached Heseltine at lunchtime on Monday 6 January and was immediately and selectively leaked to the Press Association by Colette Bowe, chief information officer at the Department of Trade and Industry, at Brittan's request. There was controversy over whose orders Colette Bowe was following. The Attorney-General, Sir Michael Havers, took a stern view of leaks, especially of confidential legal advice, and threatened to resign if an official inquiry was not set up to look into it. Thatcher agreed to do this.
January 1986: Heseltine resigns