LDVideo: Nick Clegg visits Sheffield Forgemasters, launches £950m regional growth fund

Video also available at the Guardian website. Transcript below.

Nick Clegg travelled to Sheffield today to launch a £950m regional growth fund, including a £36m government loan to Sheffield Forgemasters.

From the BBC:

Deputy Prime Minister and Sheffield Hallam MP Nick Clegg said it would support apprenticeships and equipment.

The coalition had cancelled an £80m loan to Forgemasters to build parts for nuclear power stations as part of a review of Labour’s spending decisions.

Forgemasters said the newer, smaller loan would be used to prepare for future contracts.

Graham Honeyman, chief executive of Sheffield Forgemasters, said: “We’re putting in other plant and equipment to make sure that we’re ready for the future of nuclear and other industries as well.

“We will have access to up to £36m. That will be spent on areas like the melt shop, the forge and the machine shops. Over a period of 18 months we will be able to put new plant and equipment in.

“This loan will be used for plant and equipment enhancements for the forge and machine shops to expand the business. It will also provide additional training and further refinement of our manufacturing processes and firmly underpins the country’s place at the leading edge of engineering technology.”

Here’s what Nick had to say in Sheffield today:

We’ve been able to announce today that Forgemasters will receive a multimillion pound loan, so that this world-beating company can take on more people, create more apprenticeships, invest in new equipment on the shop floor.

I’m acutely aware, of course, as a Sheffield MP, how much controversy there was last year because the previous Government’s loan was not affordable at the time. And so I’m so pleased that now we are able to work in partnership between this Government and Forgemasters because this is a world-beating company – not only famous here in Sheffield, but famous around the world for the great work that it does. It’s very exciting: this is a fund where we use your money, taxpayers’ money. And for every pound of taxpayers’ money, the private sector puts up about six pounds, and that will create and safeguard 325,000 jobs in areas like this which for too long were dependent under Labour on handouts from Whitehall.

What we’re doing is investing in success, building jobs that last in areas which for too long were just simply dependent, over-reliant on the beck and call of Whitehall.

This company, for instance, exports over eighty per cent of the things it produces here. And I think it would be more difficult for world-beating companies like that to do that if we were on the margins of what is the world’s largest borderless single market. We have got 500 million consumers on our European doorstep and I think it’s right – if we want to create jobs and create growth – that we’re at the centre of that European debate and not on the fringes of it.

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  • Andrew Duffield 31st Oct '11 - 7:41pm

    How much more Liberal it would have been to have a £950m tax cut – on employers’ NI say – than yet another state subsidy to prop up politically selected failing firms.

    Short-term politics; 950m. Sustainable economics; Nil.

  • @Andrew – a) they can’t do a tax cut now because it doesn’t sit with all the austerity rhetoric, not that this exactly fits with the “no plan B” message and winding down the RDAs and
    b) the tax cuts will be an electoral bribe so will happen closer to the election for maximum effect

  • Andrew Suffield 1st Nov '11 - 8:14am

    not that this exactly fits with the “no plan B” message

    Regional development funds were part of the plan from the beginning. It’s just that it took this long to set them up.

    Massive government investment in selected industries, to boost the economy, was always something they were doing. Scrapping Labour’s pre-election spending spree did not change that.

  • Scrapping the orginal Forgemasters loan was an overtly political gesture by Osborne backed by Laws/Alexander who were at best extremely naive. This is pathetic attempt to put right a wrong.

  • Andrew – what would £950m do to tax rates? Cut 1/2p off Income Tax/National Insurance for one year?

    This is capital spend so how would it be funded next year.

    In other areas this is going to schemes that will have a massive impact on regional development. In Burnley there will be the reopening of a short stretch of rail line that will allow rail links from Burnley and east Lancs to be cut from over an hour to about 35 minutes. Cost about £8 million – I can’t think of a single way in which that money could be used which would get a bigger dividend in terms of development for that area.

  • Andrew Duffield – Forgemasters isn’t a failing firm it’s actually very successful. I can’t answer for the other businesses getting money but I imagine throwing money at failing firms isn’t going to be the top priority for trying to get the economy back on its feet.

    AlexKN – if this was a single announcement you might be right, but given that the Forgemasters loan is just one of many that were announced I think it’s a little churlish to call it an attempt to right a wrong. Forgemasters didn’t have to put in a bid for Regional Growth Fund money and they certainly wouldn’t do it just to get the Lib Dems out of a hole, but they did it to help their own business.

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