As a result of a recent £19 million acquisition, Eastleigh Borough Council is now leasing out factory premises to Chinese-owned aerospace defence company AIM Aviation. The premises at Bournemouth Airport is home to AIM Altitude who specialise in fitting out commercial aircraft cabin interiors but in addition to a leading-edge civilian business that boasts world class clients like Emirates Airline and Boeing,the company is also an MOD and BAE Systems defence contractor. According to The Campaign Against the Arms Trade (CAAT), BAE Systems is the world’s third largest arms manufacturer and exports military hardware to 100 countries.
As part of the military side of their operations, AIM Altitiude, say they manufacture components for use in the BAE Systems Typhoon fighter jet cockpits. The Typhoon is part of a proposed £65bn trade deal that will see 48 of the fighters exported to Saudi Arabia. Any involvement in a deal supplying military hardware to Saudi Arabia by the Council’s business partners could prove to be an embarrassment for Eastleigh’s ruling Liberal Democrat group as the Party has previously called for a suspension in arms sales to countries with poor human rights records.In 2016 an article on the Lib Dem website stated:
“There is considerable evidence that British-supplied weapons are being used in Yemen to specifically target civilians and to destroy Yemeni cities. This is a breach [of] international humanitarian law, and we are calling for the suspension of new arms contracts with Saudi Arabia.”
Lib Dem leader Vince Cable recently branded the visiting Saudi Crown Prince Mohammed bin Salman as a “dictatorial head of a theocratic, medieval regime”.
But while opposing the export of military hardware to Saudi Arabia, Eastleigh’s Liberal Democrat leader, Keith House told Eastleigh News that the council couldn’t prevent it.
“I agree with Vince: Britain should not be selling arms to Saudi Arabia. The Borough Council is not in a position to regulate this as it is a matter for UK government.”
“Our tenants make a range of products for legitimate commercial sale, as Aim Aviation do for British armed forces.”
Aim Alititude’s Chinese state owners AVIC International produces military aircraft for the Chinese armed forces and have also supplied jet fighters to North Korea.
According to Wikipedia:
“The major focus of AVIC is to efficiently develop indigenous military technologies and to eventually compete with Airbus and Boeing in the civilian airline industry” In 2016 AVIC reported a revenue of $62 billion.
Like many local authorities who have suffered a cut of almost 50% in the government support grant since 2010, Eastleigh Borough Council has developed an investment strategy of borrowing money at preferential rates to build up a commercial property portfolio then using the income to support public services. Eastleigh’s portfolio is currently worth around £250 million and they say the rental income has been a major factor in keeping Council Tax down. EBC recently celebrated 15 years without a tax rise in ‘real terms’. The council owns a diverse portfolio of retail and business premises throughout the borough which they say also creates local jobs and investment. This is the first acquisition outside the borough and the first business relationship with a defence contractor. The deal is set to last 25 years and will generate an income of £5.5 million a year.
The purpose built factory had been completed for AIM in 2015 at cost of £11 million and was purchased in September 2017 by EBC for £19.3 million in a transaction that was conducted behind closed doors as ‘exempt business’ due to the commercial need for secrecy – with no opportunity for public scrutiny.
Referring to Public Works loan borrowing one senior local Conservative told Eastleigh News:
“EBC are borrowing cheap money again on behalf of Chinese owners just like they did with the Ageas Hilton Hotel. Surely this isn’t following the rules?”
In January, a local low-circulation newspaper announced the purchase and quoted Council Leader Keith House as saying the council was ‘very pleased’ with the deal which would ‘help to protect our frontline services’. While the council is confident it has secured a substantial income stream, and there is no suggestion that there is anything illegal about any aspect of this deal, it remains to be seen how many residents will be happy with the ethical implications of supporting military exports and the lack of public consultation in the council’s property investment strategy.
Eastleigh Borough Council have not responded to a request for a comment.