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aote 01 9 April 1999
Lord Falconer
Horizon BA/POCL
. Attached is a note for handling your meeting on Monday with Mr Naruto,
Vice Chairman of Fujitsu and Chairman of ICL. He will be coming with
Keith Todd, Chief Executive of ICL, and George Hall their head of corporate
affairs. Steve Robson from the Treasury will also be there. The note has
been prepared with the agreement of Alan Milburn and Lord Falconer.
. The meeting was originally requested by ICL as a ‘courtesy call’ to talk about
Durham and ICL/Fujitsu’s plans for continued expansion in the UK. But the
main topic will be Horizon.
. As the note shows a good deal of progress has been made in the negotiations.
A potentially viable deal is now in sight.
. Naruto will be seeking your commitment to reach a legally binding agreement
by the 23" April. He will threaten that Fujitsu will pull the plug if this
doesn’t happen, and that given the huge commitment that Fujitsu have made
to the UK they deserve better treatment. Without an agreement, Fujitsu will
have to make a provision for a £300m loss in their annual accounts. This
would wreck their plans to float ICL.
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. Your main aim should be to give a strong reassurance that the government is
keen to reach an agreement on Horizon and that you acknowledge the efforts
that Fujitsu and ICL are making. However, it is vital that you do not commit
to reaching a legally binding agreement by April 23rd (a much more realistic
goal is to reach non-binding heads of agreement, which should be enough to
save them from having to make a provision in their accounts), or accept that
government has been to blame for any of the problems or delays.
. To set the right tone for the meeting you might wish to make the following
points at the very beginning:
Your deep appreciation of Fujitsu’s continuing commitment to the UK
How much you appreciated the efforts to help the workforce in Durham
against a background of very tough global pressures
That you recognise that the UK has virtually all of Fujitsu’s European
investments and even more investment than the US
That Fujitsu’s investment in telecoms in Belfast has been a great example to
others in Northern Ireland
- You may then wish to turn to the substantive discussion on ICL Pathway,
following the line set out in Annex A.
. You should be aware that Mr Naruto was at your speech in Tokyo. After you
had finished he said to his colleagues that Britain was very lucky to have had
both a Thatcher revolution and, now, a Blair revolution. Japan was still
waiting for its Thatcher revolution.
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