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Last Updated: Monday, 10 May, 2004, 13:39 GMT 14:39 UK
Call for shipyard 'deal' answers
Govan shipyard
The Govan yard was bought by BAE Systems
The government is under pressure to answer allegations of a "secret deal" with two firms to boost Labour's vote at the first Holyrood elections.

Martin Sixsmith, a former civil service press chief, claimed ministers promised to approve a merger between GEC and BAE if GEC agreed to buy Govan shipyard.

The claims date back to the 1999 Scottish Parliament elections.

A month before the poll Kvaerner had announced the closure of the Clydeside yard with the loss of 1,200 jobs.

Electoral fear

According to Mr Sixsmith a "cynical trade-off" was agreed when the Scottish National Party was running neck and neck with Labour.

The SNP's Westminster leader Alex Salmond has urged Prime Minister Tony Blair to confirm or deny the claims.

He said: "The behind-the-scenes deal that Martin Sixsmith describes lays bare the true nature of New Labour.

"But it also illustrates the influence the SNP has in protecting and promoting the Scottish interest.

"When Scotland backs the SNP, the government in London is forced into defending Scottish interests out of electoral fear."

SNP Westminster leader Alex Salmond
Alex Salmond called on government to answer claims

Writing in The Sunday Times, Mr Sixsmith claimed the government made the "extraordinary" deal with GEC in 1999 when he was working for the firm as communications director.

He said Mr Blair initially refused to let GEC sell its armaments business to BAE in a 7bn deal because of monopoly fears.

But Mr Sixsmith said that changed when Norwegian shipbuilder Kvaerner announced the closure of the Govan shipyard one month before the May 1999 election.

GEC publicly confirmed its interest in the shipyard on polling day and Labour secured the most MSPs in the Scottish Parliament, allowing it to form a coalition administration with the Lib Dems, Mr Sixsmith said.

He said the merger went ahead later that year, making BAE an "almost monopoly supplier" and as a consequence the firm secured "a powerful hold" over the Ministry of Defence.

Mr Sixsmith later worked as the Department for Transport's press chief where he became embroiled in a row over leaked e-mails, which eventually forced Transport Secretary Stephen Byers to resign.

Prime Minister Tony Blair's official spokesman refused to be drawn on the matter, saying the merger between the two companies had been handled in a ''clear and transparent way''.

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