Union plea to save £80m Sheffield Forgemasters loan

Sheffield Forgemasters [picture: Laurance Richardson] The firm was given the loan to make parts for nuclear power stations

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Union leaders have warned that withdrawing an £80m government loan to a South Yorkshire engineering firm would lead to job losses.

Unite wrote to Business Secretary Vince Cable urging him to honour the loan awarded under Labour to Sheffield Forgemasters to build nuclear parts.

But Mr Cable refused to confirm the loan when pressed by Sheffield Central MP Paul Blomfield in the Commons.

A review is under way into all Labour's spending decisions since January.

Unite said withdrawing the loan would cost jobs and jeopardise Britain's preparations to build a new generation of nuclear power stations.

'Unnecessary uncertainty'

Unite leader Derek Simpson said: "Failure to support Sheffield Forgemasters would be a colossal error of judgment.

Analysis

Alan Whitehouse

Losing an £80m government loan will not be the end of the world for Sheffield Forgemasters.

But it could end the chance of South Yorkshire becoming a centre of excellence for a new civil nuclear power industry. That's because the £80m would be used to unlock other sources of finance to allow Forgemasters to buy equipment to make parts for nuclear reactors.

The idea is part of a plan by Yorkshire Forward to set up companies to build a new generation of nuclear reactors and power stations and provide jobs.

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.

"Britain needs companies like Sheffield Forgemasters if we are to meet our low carbon energy needs and build a modern, advanced manufacturing base.

"The uncertainty that the review of this loan and other loans is creating could cost the UK thousands of jobs if there is not a quick and positive decision by the new coalition government."

Mr Simpson also made a personal plea to Deputy Prime Minister and Sheffield Hallam MP Nick Clegg to use his influence to support the company.

He said: "Nick Clegg spent much of the election campaign talking about Sheffield and the need to support jobs in the area.

"If he is as proud of Sheffield as I am he will use his influence to do everything possible to support this very special company."

In the Commons Mr Blomfield said the Forgemasters loan had been subject to "rigorous scrutiny" and warned that the further review was causing "unnecessary uncertainty".

Mr Cable said that agreements signed off under Gordon Brown were of "variable quality" with funds granted "in a hurry" in some instances.

He said: "We inherited a very large number of projects which were agreed in a hurry in the run-up to the last general election.

"We now have to judge them on the criteria of value for money and affordability."

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