Government stops loan to Sheffield Forgemasters--Bad news for New Nukes?

The bell tolls for new nukes and Sheffield Forgemasters!

It is good to see this government showing the integrity and ethics in their dealings that always seems to allude the francophile nuclear industry.

As stated---If nuclear is to be built it must be on a proper commercial basis.

It is pointless to subsidise new jobs or industries.


Coalition government axes £2bn of projects


Page last updated at 14:12 GMT, Thursday, 17 June 2010 15:12 UK

E-mail this to a friend Printable version Danny Alexander: 'The last government committed to spend money it simply did not have'

The coalition government has cancelled 12 projects totalling £2bn agreed to by the previous Labour government since the start of 2010.

These include an £80m loan to Sheffield Forgemasters and new programmes for the young unemployed, Chief Secretary to the Treasury Danny Alexander told MPs.

Mr Alexander said the cuts were necessary to tackle the budget deficit and would be done in a "fair" way.

Labour accused him of an "attack on jobs" and industries of the future.

But Mr Alexander said the previous government had gone on a "pre-election spending spree in the full knowledge that the government had long since run out of money".

'No money'

He told MPs: "We are determined to tackle the unprecedented budget deficit and bad financial management we have seen over the past decade, but are equally determined to do this in a way that is fair and responsible.

"As a result of the poor decisions made by the previous government, I have taken the decision to cancel certain projects that do not represent good value for money, and suspend others pending full consideration in the spending review.

Sheffield Forgemasters International Limited: £80m

In Full: Projects axed/suspended

"We have also found another spending black-hole in the previous government's plans - projects had been approved with no money in place to pay for them.

"I am determined to deal with this problem head-on and ensure we never see this kind of irresponsible financial planning in government again"

In an angry response, shadow chief secretary Liam Byrne accused the Lib Dem minister of a U-turn over public spending and asked how many jobs would be lost as a result.

He told Mr Alexander: "Both the country and the Liberal Democrat party beyond will be aghast this afternoon at your attack on jobs, your attack on construction workers, your attack on the industries of the future and the cancellation of a hospital.

"Let me ask you: what could be more front line than this? In five minutes this afternoon you have reversed three years of Liberal Democratic policy of which you were the principal author. What a moment of abject humiliation."

He also said the spending projects being axed amounted to just 0.05% of government spending, "nailing the myth" that Labour had operated a "scorched earth" policy in the run-up to the general election.

'Crucial military equipment'

Mr Alexander said a further 12 projects with a value of £8.5bn approved since January would be suspended or referred for consideration by the spending review process over the coming months.

They included the health research support service, the Kent Thameside strategic transport programme and the libraries' modernisation programme.

"Any other new major hospital schemes will be assessed in the context of the spending review to ensure they are affordable and represent the highest possible value for money," said Mr Alexander.

He said the government had acted to confirm approval of a number of projects including funding for essential medicines in case of a flu pandemic, some hospital projects, support for post offices and spending on "crucial military equipment" in Afghanistan.

Sheffield Forgemasters was told in March it would receive the loan to build a world-leading 15,000 tonne press to supply specialist components for the nuclear industry.

The £80m loan aimed to create up to 180 jobs in the city and help the firm to bid for contracts on the next generation of nuclear power stations.

The announcement that it would be axed was met by cries of "shame" from Labour MPs.

Forgemasters Chief Executive Graham Honeyman said it was "a huge disappointment to all at the company," but he said it would now focus on other elements in its development.

'Over-committed'

Deputy Prime Minister Nick Clegg, a Sheffield MP, said in a statement that he regretted the government "cannot afford to support its expansion" but added "the truth is that this loan was promised by the outgoing Labour government as a calculated ploy to win support in Sheffield just ahead of the election".

A string of North-East Labour MPs attacked Mr Alexander in the Commons over the decision to cancel a project at North Tees hospital, accusing the Tories and Lib Dems of tearing up their manifesto commitment to protect front line health spending.

Mr Alexander told them he understood the decision would be "very disappointing to those who have worked on the project" but it had not met value for money criteria.

He was also attacked for scrapping the Future Jobs Fund and the planned extension to a scheme guaranteeing work or training for the young unemployed. He said it would be replaced by a more effective scheme next year.

Mr Alexander said the government had also inherited a large number of school building projects approved in recent months as part of the Building Schools for the Future (BSF) programme where spending has been "over-committed" and may have to be cut back. An announcement from the schools secretary is expected shortly.

The chief secretary also announced an urgent review of inherited spending commitments for 2010-11, totalling at least £1bn, where funding was reliant on underspending.

Are you involved with one of the projects concerned? What are your views on the cuts? You can send us your comments using the form below: