Adrian Bailey, the Labour MP who chairs the business select committee, is writing to Vince Cable with a series of questions on behalf of the committee about the decision to cancel an £80m government loan to Sheffield Forgemasters.
His questions include:
- What would have been the cost to the government of the loan, year on year?
- Why did you cancel this loan, but not ones to Nissan, Ford and BAe?
- Was the loan properly costed?
- What role did Andrew Cook have in the loan being cancelled?
- What assistance can be provided to the company in future?
Of all of those questions, the last may prove the most fruitful. Ministers, including Cable, have batted away any questions about the decision to cancel the loan in the first place. In Cable’s words:
It was a large amount of cash for the department to commit against a background of sharply diminishing resources.
But what might the government do in future to help Forgemasters? It has a £1bn fund for regional growth – could some of that be used for a new loan?
The company believes there is a chance the government could yet come back and offer to finance the project, possibly some time next year. Graham Honeyman, the chief executive, wrote to the business secretary at the end of last week and said:
“The company has already invested significant amounts of time, energy and finances into the project and the period into 2011 is now essential for us.”
“Sheffield Forgemasters needs to be in the best possible position to revisit this proposal early next year.”
Meanwhile, Labour will continue to attack the coalition on what they believe to be fruitful ground. But while they have so far failed to extract an apology from ministers for the previous decision, they might have more success in campaigning for a new loan to be granted next year and then branding it a success for the party in opposition.
Jim Pickard
Kiran Stacey