Graham Honeyman, the Chief Executive of Sheffield Forgemasters, put a brave face on today’s decision to axe an £80m government loan, which would have created 180 jobs at the company. Describing this as a “huge disappointment”, he said it is important now to focus on other elements of the company’s development.
Good for him. But the TUC can’t be this sanguine. We are trade unionists, so of course we care about the loss of 180 potential new jobs. But we also care about investment in the future strength of British industry.
This loan, announced in March, was designed to make Forgemasters one of two in the world able to make large forgings for the nuclear energy industry. Alan Whitehouse of BBC Look North had previously written that the loss of this loan “could end the chance of South Yorkshire becoming a centre of excellence for a new civil nuclear power industry”, adding: “Unions and MPs are arguing that, in the grand scheme of things, £80m is not a lot of money. But it could make all the difference in the world to South Yorkshire.”
Treasury Chief Secretary Danny Alexander said today that he had “taken the decision to cancel certain projects that do not represent good value for money”. Meanwhile, Business Secretary Vince Cable said the Government “hopes [Sheffield Forgemasters] secures private investment for this worthwhile project.” But what private investor would possibly wish to support a development that a Treasury Minister says is not good value for money?
Sheffield MP and Deputy PM Nick Clegg has described the loan as “a calculated ploy” by Labour to win support in Sheffield “when they knew all along that there simply wasn’t the money to keep to that pledge in the first place”. Hang on, we are talking about an £80m loan. Not a gift. A loan. As part of a stimulus package to support seed corn industries and stimulate the economy to bring us out of recession.
Today’s decision is not just a bitter blow for Sheffield Forgemasters and the people of Sheffield, but raises real questions about whether the Coalition Government is serious about manufacturing, rebalancing the economy away from finance and the transition to a low carbon economy.