Ulster tobacco sweetener leaves MP with bad taste

A tobacco company has been paid pounds 10m by the Government to move to a factory in the Rev Ian Paisley's Ulster constituency - a move which means a net loss of 650 jobs.

The payment has been attacked as politically motivated by a Labour MP whose constituency will be affected by the decision. As the Government struggles to survive without a majority, the 12 Unionist MPs wield increasing power in Westminster.

The row erupted after Gallagher, makers of Silk Cut and Benson and Hedges cigarettes, announced it was to close its factory in Hyde, Greater Manchester, in the next four years with the loss of 950 jobs. The firm has been paid to expand its existing operation in Ballymena, Northern Ireland, creating 300 jobs there.

Tom Pendry, MP for Stalybridge and Hyde, has attacked the move while unions are planning a picket of the Silk Cut rugby league final due to be held at Wembley on 3 May. Sixty-five Labour MPs have signed a Commons motion condemning the decision.

Gallagher has two factories in the UK, one with 950 workers in Hyde and another with 1,100 in Mr Paisley's constituency. The Northern Ireland factory is in a Protestant area and 86 per cent of its workforce are Protestants.

Mr Pendry has written to Ian Lang, the President of the Board of Trade, and to Sir Patrick Mayhew, the Secretary of State for Northern Ireland, to demand explanations for the large grant. Mr Pendry said: "It is inexcusable if, in an election year, political decisions are allowed to close a profitable and efficient factory."

Ian Birks, general manager for corporate affairs with Gallagher, said the decision was made purely on commercial grounds. A spokesman for the Industrial Development Board, which made the grant decision, said: "The support offered is in line with our overall policy which is to encourage the development of internationally competitive companies."