Lord Mandelson, the former business secretary, todayclaimed the government had misled parliament after it claimed there had been no Treasury support for an £80m loan to Sheffield Forgemasters. He was speaking alongside the shadow business secretary, Pat McFadden, after the two men had spent more than an hour looking at papers in the business department relating to the planned Forgemasters loan.
The loan was cancelled by the government in what is seen as a blow to a strategic UK industry. The coalition government has come up with different explanations for the decision, but said an intervention by a rival Sheffield engineering firm and a Tory donor calling for the loan to be cancelled was not relevant. The loan was cancelled weeks after Andrew Cook, who has subsidised some of David Cameron's flights, warned the government it could be illegal.
Mandelson, taking a break from his book promotion tour to examine the papers, said: "The loan was independently assessed and signed off; value for money was vouched for; and Sheffield Forgemasters themselves were prepared also, by the way, to dilute their own shareholding. "Far from it being a blank cheque the money was vouched for and signed off by the Treasury itself." He said he thought Nick Clegg, the deputy prime minister, had been poorly briefed and ministers had taken the decision "rather on the hoof without listening to all the facts and also without considering its importance not just to Sheffield Forgemasters but to the whole of the supply chain for the nuclear industry."
He said: "What we'd have created in Sheffield was one of only two or three such sized presses anywhere in the world. What's the result if the government step back and don't let it go ahead? It goes to Japan or goes to Korea and yet again Britain loses out on another major industrial opportunity." He added: "I hope ministers will look again. Nobody will criticise them for changing their minds."McFadden added the papers showed the loan "was very carefully considered by the Industrial Development Advisory Board, the external body that looks at such decisions. They concluded that it represented good value for money. Rather than continuing with wrongful statements about the project, the government should look again at this decision".
