PMQs: It’s Sheffield Forgemasters, stupid! Oh yes! Of course it is!

An energetic Nick Clegg took Prime Minister’s Questions today. Notice how casually I said that. Only the first Liberal/LibDem leader to take questions (acting) as PM since Lloyd George in the 1920s. Pretty blooming historic, that.

If that was not enough, our cup ran well and truly over with yet another first and, perhaps, unique occasion. Jack Straw at the dispatch box pretending to be Labour leader! Clegg stood in for Cameron because the latter was in the USA. Straw stood in for Harman because she was in Peckham.

Jack Straw probably does bellowing quite well when he hasn’t got a sore throat. Today, he seemed to be rather hoarse so his bellowing sounded rather weak.

He was bellowing about Sheffield Forgemasters. You might say that Straw, and indeed the Labour party, are obsessed with Sheffield Forgemasters. They are always harping on about the company. This time Straw seemed to think he had found an earth-shattering inconsistency in the government’s reasoning. Something about diluting the shareholding.

The unwillingness of the SF board to “dilute its shareholding” was given by the government as a reason why a loan was asked for. But Straw says that the CEO of the company has said that he was always willing to dilute his shareholding. Straw seemed to think that this was a killer point. But it seems to be answered quite well by the simple riposte “Why didn’t he do it, then? – Why didn’t the CEO solve the problem by diluting the shareholding?”

Clegg replied with the usual line about Labour leaving the country in deep doo doo. He also accused Jack Straw of offering a “dissertation” rather than a question. Fair point. Straw was rambling a bit.

Nick Clegg also mined deeply from that new little goldmine for the government – Peter Mandelson’s memoirs. “We were deep in a pit of debt and still digging” is a particular gem which he quoted.

Straw also said that Clegg had said in the Yorkshire Post (stop nodding off at the back!) that SF could get a loan from elsewhere. But yesterday, Straw said, SF said that they couldn’t get a loan from elsewhere. “His (Clegg’s) whole edifice has collapsed” said Straw. He wishes.

I don’t think Straw really made any killer points here. Clegg quite rightly said that the last government did nothing to ensure banks were giving to firms like SF.

It seems that Labour have already printed millions of leaflets with “Sheffield Forgemasters” repeated on them five million times. This is their campaign. Sheffield Forgemasters. They think they are onto a winner here.

But it is an inherently dishonest and disingenuous line which they are taking. Even though it was a loan, the government would have had to borrow money, pay interest from the taxpayer, and then loan it to SF. And if they would have not cut the loan to Sheffield Forgemasters, what else would Labour have cut instead? They haven’t offered a single penny of specific savings to make up any of their £50 billion of planned cuts.

Other things which happened or emerged from this PMQs session were:

  • Nick Clegg gave an excellent answer on the Building Schools for the Future programme cancellation. He emphasized that Labour would have had to cut the programme if they had come into power anyway. He also mentioned that the government would have a replacement programme which would include primary schools (which Labour had excluded from the BSF programme).
  • Nick Clegg repeated the good news of the pupil premium on several occasions, including stressing that it will help pupils whether they are in urban or rural areas.
  • Nick Clegg said that, after the Cameron/Obama meeting, there are grounds for optimism for hoping that Gary McKinnon will be tried in the UK.
  • Straw went big on saying that the LibDems have no influence on the government, picking up on a poll finding publicized by Lord Ashcroft today. It seems unusual for the Labour party to be taking its cue from information provided by Lord Ashcroft. Clegg dealt with the point by listing a whole load of LibDem policies which are being pursued by the government.
  • In answer to Clare Perry MP, Nick Clegg highlighted the authoritarian record of the Labour government.
  • Clegg was asked whether, when he voted for the VAT increase, he was being a “revolutionary pragmatist” or “pragmatic revolutionary”. –A good line from the Plaid Cymru leader.

By the way, the BBC’s John Pienaar didn’t think Clegg did too badly and traded “blow for blow” with Straw. He also pointed out that Straw looked like he really hates the Liberal Democrats. Great.

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43 Comments

  • Claire Ward’s not an MP any more…

  • And the pragmatic revolutionary line was from the leader of Plaid – not sure Nick fully appreciated this!

  • Andrea Gill 21st Jul '10 - 1:45pm

    … or of the confirmation that Yarlswood will be closed under this government!

  • I must say I was particularly nervous in the buildup to PMQs today. I thought Labour would throw everything at Nick… thankfully, I was pleasantly surprised at how well it all went. Nick did a great job.

    One minor point, as you’re allotting credit for the revolutionary pragmatist/pragmatic revolutionary line, rather than a Labour MP, it was Plaid Cymru MP Elfyn Llwyd (Dwyfor Meirionnydd) who came out with it.

  • “….the BBC’s John Pienaar didn’t think Clegg did too badly….”

    Lol. They do say that desperate people cling on to small comforts.

  • What would Labour have done tony?

  • Looked like the cat that got the cream; stuck to the exoected Tory script; mediocre at best. Just as well he was facing a no hoper like Jack Straw.

  • Paul McKeown 21st Jul '10 - 2:59pm

    Clegg needs to answer Jack Straw’s question about Sheffield Forgemasters. If he doesn’t it is going to be very damaging, possibly for the length of this parliament and even beyond. Jack Straw is a reminder of everything I loathed about NuLab, but he believes he has a point and Clegg has done nothing to disabuse him of that notion.

    Agree with the praise for Julian Huppert and for the Liberal Democrat’s record in campaigning against imprisonment of child asylum seekers and their record in ridding Britain of this stain. Excellent.

    As for Elfyn Llwyd, he is one of the very best MPs. Does anyone remember him absolutely demolishing Jeremy Paxman during an interview in the election campaign?

  • @Paul McKeown

    So you are in support of sending these children back to Afghanistan, and other places to be put into ‘re-integration’ camps, as is the coalition policy?

  • Paul McKeown 21st Jul '10 - 3:18pm

    @jayu

    This government will abide by its obligations under the 1951 treaty, a happy change from the policy of NuLab’s international terrorists.

  • I’ll take that as a yes then Paul.

  • Well, well, Nick Clegg actually referred to “the most disastrous decision of all, which is the illegal invasion of Iraq”. He said this at the Government Dispatch box.
    During PMQs.
    With the likes of Osborne and Hague having to sit behind him.
    That’s quite different from saying the same thing from the Lib Dem benches a few months ago….

  • nonny mouse 21st Jul '10 - 4:14pm

    >> the BBC’s John Pienaar didn’t think Clegg did too badly and traded “blow for blow” with Straw

    Clegg did a great job. He was a bit nervous and fluffed his lines a few times, but Jack Straw was all over the place. Even the speaker fell asleep and miscounted the number of Jack Straw’s questions. An easy win by Mr. Clegg.

    Jack Straw did achieve one first though – he made Harriet Harman look good..

    On Sheffield Forgemasters (SFM) we really should not let Labour get away with it. Even SFM admits that there is no business case for the loan because they are not willing to finance it themselves and the banks wont touch it.

    If the government funded SFM then the £80 million would take more than 8000 average tax payers paying all of their tax for a year to create 180 jobs at the cost of £444,444 per job. The SFM issue was about jobs in Westminster not jobs in Sheffield and Labour should be shown up as the corrupt party in government that they were.

  • Paul McKeown 21st Jul '10 - 4:52pm

    @Tom King

    Oh – wrong PC. But you are wrong, Paxman just gave up and threw his “evidence” away, which he obviously hadn’t read. The interviewee continually referred Paxman to references in the document on which Paxman thought he was basing an argument, but which Paxman had obviously not read.

  • Paul McKeown 21st Jul '10 - 4:54pm

    @George Kendall

    I do wish you would pass that on to Clegg, so that he can refute Labour’s arguments the next time he is questioned on the subject.

    @Nonny Mouse

    Yes, it would help if this was refuted. As it is, the story is becoming quite corrosive.

  • If you are going to use articles from local (to Forgemasters) press then you must also factor in the following

    http://www.yorkshirepost.co.uk/letters-to-the-editor/Thursday39s-Letters-Dynamic-Forgemasters-looks.6380296.jp

    Dr Honeyman’s very public response to the suggestion that he did not want to “dilute” shareholding – apart from him the rest of the shares are owned by the workforce. Also Forgemasters” have worked with government advisers, including the Shareholder Executive’s own corporate finance experts, on the details of a financing package. The package included not only the Government’s loan, but also a substantial equity injection from the private equity market which would have significantly diluted the existing shareholding. That private equity portion was at the insistence of the Government to safeguard the finance package which filled the funding gap without creating unserviceable levels of debt for Sheffield Forgemasters”.
    A fact which Nick Clegg has himself acknowledged in a letter to Dr Honeyman. He now refuses to acknowledge the same publicly.

    On the issue of the number of jobs and the price per job being quoted here – it is a nonsense.

    This is from a member of the bid team who worked on the package with Forgemasters – again a very public rebuttal of the affordability of the loan.

    http://www.yorkshirepost.co.uk/letters-to-the-editor/Monday39s-Letters-Forgemasters-decision-will.6374595.jp

    “This project would not just create an additional 180 jobs, but would safeguard 820 jobs directly in the company and up to 2,000 jobs in the supporting industry reliant on Sheffield Forgemasters. The additional employment in the construction phase over the three or four year build programme would have again created in excess of 1,000 direct and indirect jobs for an industry in need of large capital construction projects at this time”.

    This project was by no means on a whim and a prayer. It would have taken Sheffield Forgemasters’ exports from £100m per year to more than £250m a year – and that is hard core goods being sold out of the UK generating cash for a country which is in dire need of boosting its export potential to gain revenues.

    “In short, this decision will affect more than 4,000 jobs in the next four or five years, and cost the UK upwards of £1.5bn in lost revenue from exports that Forgemasters would have been shipping out of the country. ”

    The question is – given the government’s stated aim of private sector growth and a rebalancing of the economy away from finanical and service sector, how can they afford not to?

  • Paul McKeown 21st Jul '10 - 6:02pm

    @Tom King

    Sorry, all clear now! 🙂

  • Andrew Suffield 21st Jul '10 - 6:58pm

    The question is – given the government’s stated aim of private sector growth and a rebalancing of the economy away from finanical and service sector, how can they afford not to?

    You’re assuming that the company would be unable to get a commercial loan or investment on a prospect of a £150m/year payout. Given that’s twice the value of the loan, that seems unlikely to be a proposal that any bank or investor would reject. It looks like the project can and should go ahead – entirely with private funding.

  • Andrew Suffield 21st Jul '10 - 10:28pm

    If the other shareholders don’t want to dilute their shareholder, then it makes sense not to proceed.

    Or just to get a commercial loan. There are lots of ways to get investment capital for good projects.

  • The final debate (adjournment debate) Wednesday night. I think Clegg is in trouble now.
    There are some very serious questions to answer and he won’t be able to fob them off any more.
    His performance at PMQ’s was an utter disaster, just read the papers in the morning.
    Liberal Democrates are paying a high price for this coalition and I really fear for the party.
    before you shout me down as a troll I voted Lib Dem and have done for the last 3 elections but I do not think I could do it again.

  • Nick Clegg, Chris Huhne and several now government ministers rightly stood side by side with Gary McKinnon’s mother at a London demo for Gary and said pre-election that Gary McKinnon could and should be tried in the U.K and that Gary McKinnon should not be extradited. David Cameron said the same.

    Everyone is now anxiously waiting for the coalition to keep their promises and to refuse to extradite Gary McKinnon and to allow him to be tried in the U.K.

    Great to have a government that stands up for their own citizens.

    Well done Nick and Co.

  • Andrew Suffield – I am not assuming anything. SFM are stating that they had raised all of the private finance, both through dilution of the majority shareholder’s holding (bearing in mind that the rest of the shares are owned by the workforce, and that all of them have put their cash, sweat and toil into the company since the buyout in 2005, and suffered huge setbacks during the massive floods in 2007) that they could, without putting the company into excessive endebtedness at exorbitant bank lending rates, or effectively losing control of the company, (which is exactly what had happened prior to the 2005 MOB).

    George – it contradicts what Nick Clegg said because he specifically stated that it was the major shareholder who did not want to dilute his shareholding, when in fact this was not the case.

    I also wonder why 80m for this project was simply cancelled as not affordable, but others were simply put on hold subject to review or given the go ahead.
    You may wish to consider this
    http://www.google.com/hostednews/ukpress/article/ALeqM5iP8tvrkiG9D0XLsxYWbGIT2XmoFA

    It really doesn’t matter now as the project (after 3 years worth of planning) has been shelved. The company will stay as it is, and is hopefully not at any risk.

    http://www.thestar.co.uk/news/Forgemasters-scales-back-nuclear-plans.6430767.jp

    However, I really do struggle to see where investment finance is going to come from for businesses like this and where the future private sector growth will start if the attitude is to be so blase.

  • Total news blackout on Mr Cooks letter ref SFM wonder why?
    Coulson would be all over this if it was Labour involved in this sleaze!
    Full independent inquiry is needed urgently.

  • Amazed at the attempts to justify the Forgemasters decision on here. My hunch is that most Lib Dems in northern constituencies think we have made a mistake here. Thought Clegg was disappointing yesterday. Feeds into the critics comments about him – callow, arrogant and lacking a certain ability to judge what and what not to say.

  • Andrew Suffield 23rd Jul '10 - 12:13am

    SFM are stating that they had raised all of the private finance, both through dilution of the majority shareholder’s holding (bearing in mind that the rest of the shares are owned by the workforce, and that all of them have put their cash, sweat and toil into the company since the buyout in 2005, and suffered huge setbacks during the massive floods in 2007) that they could, without putting the company into excessive endebtedness at exorbitant bank lending rates, or effectively losing control of the company,

    So what you’re saying is that the company is not in fact willing to take on the financial risk of this project. Why should the taxpayer do it, if the owners don’t think it’s worth the risk?

    Your argument is based on this project simultaneously being a good idea and a bad idea.

  • Anthony Aloysius St 23rd Jul '10 - 1:33am

    So – just to check I understand this correctly:

    (1) Andrew Cook is alleged to have ambitions to take over Sheffield Forgemasters.
    http://www.independent.co.uk/opinion/commentators/simon-carr/the-sketch-labour-sniffs-a-scandal-as-tories-twist-the-knife-into-ailing-steel-firm-2033458.html

    (2) He writes to a Tory Treasury minister pointing out that he is “the largest donor to the Conservative Party in Yorkshire and have been since David Cameron was elected leader” – his company having given the Conservative party £650,000 since 2005 – urging the government to cancel the offer of a loan to Sheffield Forgemasters.
    http://www.yorkshirepost.co.uk/news/Exclusive-Tory-donor39s-campaign-to.6433639.jp

    (3) Vince Cable, whose role in the decision was emphasised by the government, was “generally aware” that representations had been made about cancelling the loan, “including from an industrialist but not who he was or that he was a donor to the Conservative party” – the representations presumably being considered worth mentioning, and the fact that he was an interested party and a Tory donor very much not.
    http://www.ft.com/cms/s/0/fd6f2b68-9588-11df-a2b0-00144feab49a.html

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