THE Callaghan and Thatcher governments of the late 1970s and early 1980s blew more than Stg£70 million of public money on the ill fated De Lorean car project in west Belfast, because it was hoped that it would help to provide "a hammer blow to the IRA", according to previously secret government papers.
The revelation is one of several sensational disclosures in British cabinet and ministerial papers that are being released into the public domain by a New York court next week.
The hearing, in which the British Government is suing the auditors Arthur Andersen, is part of long fought preliminaries before the action comes to court. It was decided on Thursday that the papers could be made public, and in a London press release last night the auditors provide the first evidence of how ministers repeatedly ignored warnings about De Lorean because they were so desperate to give Northern Ireland jobs and good news.
In one critical cabinet minute from July 1978, the then Northern Ireland Secretary, Mr Roy Mason, says it is "of the utmost political, social and psychological importance that the project should go ahead. This would be a hammer blow to the IRA". His advice followed a warning the previous week by the management consultants McKinsey and Co that "the chances of the project succeeding as planned are remote."
This approach did not end with Labour. In July 1980, the Thatcher government agreed to provide assistance, of Stg£14 million extendable to Stg£21 million, on the advice of the Northern Ireland Secretary, Mr James Prior.
When De Lorean hit a further financial crisis the following February, the cabinet was asked for a bank guarantee. It was argued. "We cannot settle this on commercial grounds alone. The De Lorean venture has become something of a symbol for HMG's commitment to Northern Ireland." Mrs Thatcher wrote a note saying. "I take it this is the last [doubly underlined] help we give to this unwise project." The company went into liquidation one year later.
The British government began its legal action against Arthur Andersen in 1985, but 11 years later the case has yet to come to court. It took two years just to decide which country the action should take place in.
