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Siemens to repay UK grant

German giant sent invoice for £18 million

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Siemens has been ordered to repay £18 million of UK taxpayers' money used to build its now defunct Tyneside chip plant. The German manufacturer yesterday received an invoice for the return of the central government grant, which it has enjoyed interest free since 1996. Stephen Byers, the Trade and Industry Secretary, said Siemens had failed to meet conditions laid down at the time, according to reports in today's Daily Telegraph. Byers told the Commons the £18 million would go towards grants to attract other investment to the area. His own Tyneside North constituency is near the plant. The factory at Wallsend closed last year and over 1000 people lost their jobs. Siemens said it had always indicated that it would repay the cash should it be requested. The demand coincided with news that Siemens would open a joint chip venture with IBM in France. And the government found itself again accused of driving the company out of the country via the high exchange rate and increased costs in the UK. When Siemens first announced the Tyneside plant’s closure, ministers blamed a world chip slump, not government policy. Yesterday saw John Redwood, shadow industry secretary, accuse ministers of trying to suppress the truth. Last year, fears were raised that the real reasons for Siemens singling out the UK factory for closure were connected to reluctance to join the Euro in the early stages. Her Majesty's Loyal Opposition is, however, better known for its anti-Euro stance. Redwood went on to describe the factory in France as "an insult to the people of Tyneside." In its defence, the company said it had failed to find a similar joint venture partner in the UK. ®

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